FinReflectKG -- HalluBench: GraphRAG Hallucination Benchmark for Financial Question Answering Systems
Organizations: 1Domyn Inc
Abstract
As organizations increasingly integrate AI-powered question-answering systems into financial information systems for compliance, risk assessment, and decision support, ensuring the factual accuracy of AI-generated outputs becomes a critical engineering challenge. Current Knowledge Graph (KG)-augmented QA systems lack systematic mechanisms to detect hallucinations - factually incorrect outputs that undermine reliability and user trust. We introduce FinBench-QA-Hallucination, a benchmark for evaluating hallucination detection methods in KG-augmented financial QA over SEC 10-K filings. The dataset contains 755 annotated examples from 300 pages, each labeled for groundedness using a conservative evidence-linkage protocol requiring support from both textual chunks and extracted relational triplets. We evaluate six detection approaches - LLM judges, fine-tuned classifiers, Natural Language Inference (NLI) models, span detectors, and embedding-based methods under two conditions: with and without KG triplets. Results show that LLM-based judges and embedding approaches achieve the highest performance (F1: 0.82-0.86) under clean conditions. However, most methods degrade significantly when noisy triplets are introduced, with Matthews Correlation Coefficient (MCC) dropping 44-84 percent, while embedding methods remain relatively robust with only 9 percent degradation. Statistical tests (Cochran's Q and McNemar) confirm significant performance differences (p < 0.001). Our findings highlight vulnerabilities in current KG-augmented systems and provide insights for building reliable financial information systems, where hallucinations can lead to regulatory violations and flawed decisions. The benchmark also offers a framework for integrating AI reliability evaluation into information system design across other high-stakes domains such as healthcare, legal, and government.
Figures & tables
| Method | Hardware | Precision | Modified Parameters |
|---|---|---|---|
| Qwen LLM judge | vLLM endpoint | float16 | temperature=0.1 |
| GPT-OSS LLM judge | vLLM endpoint | float16 | temperature=0.1 |
| Lynx LLM judge | NVIDIA T4 | float16 | max_new_tokens=600, use_cache=False |
| NLI DeBERTa-v3 | Apple M4 Pro | float16 | – |
| Vectara classifier | Apple M4 Pro | float32 | trust_remote_code=True |
| LettuceDetect | Apple M4 Pro | float32 | device=mps |
| Category | Count | % |
|---|---|---|
| Dataset Composition: | ||
| Total Generated | 1,302 | 100.0 |
| Valid | 755 | 58.0 |
| Filtered | 547 | 42.0 |
| Valid Samples by Label: | ||
| Grounded (Correct) | 513 | 68.0 |
| Approach | Measure | F1 | MCC | ROC-AUC | PR-AUC | ||||
|---|---|---|---|---|---|---|---|---|---|
| W/O | W/ | W/O | W/ | W/O | W/ | W/O | W/ | ||
| lynx_llm_judge | NA | 0.831 | 0.809 | 0.374 | 0.185 | 0.657 | 0.556 | 0.756 | 0.705 |
| qwen_llm_scoring_judge | NA | 0.863 | 0.818 | 0.505 | 0.205 | 0.722 | 0.550 | 0.794 | 0.702 |
| gpt_oss_llm_judge | NA | 0.849 | 0.806 | 0.493 | 0.159 | 0.718 | 0.547 | 0.791 | 0.699 |
| nli_deberta3 | contradiction | 0.809 | 0.808 | 0.177 | 0.117 | 0.565 | 0.537 | 0.709 | 0.696 |
| vectara_hallucination | NA | 0.848 | 0.810 | 0.435 | 0.242 | 0.675 | 0.613 | 0.770 | 0.736 |
| Detector | Disagreements | Helped | Hurt | Net Impact |
|---|---|---|---|---|
| Qwen LLM judge | 113 (15.0%) | 20 | 93 (12.3%) | -73 |
| Lynx LLM judge | 113 (15.0%) | 37 | 76 (10.1%) | -39 |
| NLI DeBERTa (contradiction) | 15 (2.0%) | 6 | 9 (1.2%) | -3 |
| Vectara | 114 (15.1%) | 24 | 90 (11.9%) | -66 |
| LettuceDetect (min) | 67 (8.9%) | 15 | 52 (6.9%) | -37 |
| Line Embeddings (max) | 53 (7.0%) | 22 | 31 (4.1%) | -9 |
| Condition | Cochran’s Q | p-value | McNemar Sig. Pairs | Total Pairs |
|---|---|---|---|---|
| W/O Triplets | 132.63 | <0.001 | 29 | 55 |
| W/ Triplets | 73.85 | <0.001 | 9 | 55 |
Appendix figures & tables1 asset
Supplementary material from the paper’s appendix.
Appendix
LLM Hallucination Detection
Large language model hallucination detection identifies unsupported, incorrect, or fabricated claims in model outputs and traces.
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